Sent Via Email
DATE: April 6, 2026
TO: Fairfield Mayor Cat Moy, Councilmembers Pam Bertani, K. Patrice Williams, Scott Tonnesen, Doug Carr, Doriss Panduro and Manveer Sandhu
CC: City Manager David Gassaway, Chief Building Official Jeff Thomas
FROM: Lisa Vorderbrueggen, East Bay Gov’t Affairs Executive Director
RE: Building Fee Study Adoption, Item P.1, City Council meeting on April 7, 2026
Dear Mayor Moy and Councilmembers:
BIA|Bay Area represents more than 400 companies working to entitle, develop, design and construct new homes throughout the region, including Fairfield.
We write in response to the memorandum dated March 24, 2026, in which Willdan Financial Services — on behalf of the City of Fairfield — provided responses to the 23 questions BIA raised in its letter of March 25, 2026, regarding the Fairfield Building Division User Fee Study dated March 9, 2026. (All letters attached.)
We appreciate the city’s effort to engage with our questions. However, after careful review of Willdan’s responses, we find that a substantial number of our concerns were either unanswered, answered only partially or deflected without substantive justification.
Given the significance of the proposed fees — including a 17.7 percent increase to the Building Valuation Table applicable to all new construction — and Fairfield’s obligations under its Regional Housing Needs Assessment (RHNA), BIA|Bay Area respectfully urges the City Council to postpone the public hearing scheduled for April 7, 2026, and direct staff to provide complete, documented responses to the outstanding questions identified below.
I. Questions That Were Not Answered or Were Answered Inadequately
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The following questions from BIA’s original letter received responses that did not resolve the underlying concern:
• Question 3 (Revenue Impact of Valuation Table): BIA asked for the total projected annual revenue impact of the valuation-based Building Permit program versus the flat fees. Willdan clarified the methodology behind the 2 percent average figure but did not provide the revenue projections we requested. The 17.7 percent increase to the valuation table — which applies to every new construction permit — could generate substantially more revenue than the nominal 2 percent average implies. The City Council cannot evaluate this fee study without knowing the actual projected revenue impact.
• Question 4 (Nexus for CAP Allocations): Willdan listed the central service departments included in the Cost Allocation Plan but did not address whether each department has an explicit nexus to building permit services, as required under California law. The inclusion of departments such as Cable and Media Services requires a specific nexus justification that was not provided. • Question 5 and 11 (General Public Benefit Costs): BIA asked what portion of Community Development Administration costs covers activities that serve the general public — pre-application consultations, counter inquiries, website maintenance — rather than specific permit applicants.
Willdan’s response described the types of activities covered but did not provide the allocation breakdown or quantify what share is attributable to general public benefit. California law does not permit the full recovery of general benefit costs through permit fees. • Question 7 (Validation of Productive Hours): Willdan defended 1,650 annual productive hours as a ‘reasonable’ figure but did not confirm it was validated against payroll records, actual leave patterns or adopted budget FTE allocations. The use of an unvalidated consultant default in the denominator of the fully burdened hourly rate calculation directly affects every fee in the study. • Question 8 (Staff Time Estimates): Willdan confirmed that time estimates were gathered through staff interviews but did not address BIA’s concern that interviews are less rigorous than time logs or billing records and did not indicate whether any records were used to validate interview responses.
• Question 12 (Budget Language on Non-Permit Activities): BIA cited language in Fairfield’s adopted budget that reportedly distinguishes fee-supported activities from those serving the community more broadly — pre-development work, appeals, public information, and non-project-related activities. Willdan’s response asked BIA to provide the specific page number rather than addressing whether the study’s cost basis properly excludes those categories. This is not a reasonable response.
If the city’s own budget identifies categories that are not appropriate for full cost recovery through permit fees, the study should account for that, and the city should be able to confirm it does. • Questions 13 and 14 (Fund Classification and 100 Percent Recovery Policy): Willdan confirmed that Building is within the General Fund but did not address the policy question of whether the city has made an explicit determination — independent of this fee study — about which activities warrant General Fund subsidy rather than full cost recovery. Without such a framework, there is no principled basis for evaluating the 100 percent recovery target for each individual service type. • Questions 18–20 (Peer Jurisdiction Comparison): Willdan’s claim that it is ‘against the law’ for cities to set fees based on peer comparisons is a mischaracterization of California law. Proposition 218 and Government Code Section 66000 et seq. prohibit fees from exceeding the reasonable cost of service — they do not prohibit using peer comparisons as a reasonableness check or policy tool.
Willdan’s own study session presentation included a peer comparison, demonstrating that such comparisons are relevant and appropriate. BIA’s questions requesting specific fee comparisons for
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Vacaville, Benicia, Dixon and Suisun City — and for a prototypical 20-unit infill project at a $5 million construction cost — remain unanswered.
II. Request to Postpone the April 7 Public Hearing
The unresolved questions identified above go to the heart of the fee study’s methodology and legal sufficiency. They are not marginal or technical — they concern the cost basis, the overhead allocation, the productive hours denominator and the revenue impact, all of which directly determine whether the proposed fees reflect the reasonable cost of service as required by California law.
Willdan’s memorandum acknowledges that the public hearing has already been noticed and must open on April 7, 2026. BIA does not dispute the procedural necessity of opening the hearing. We do, however, respectfully request that the council open and then continue the hearing to a date certain — no sooner than 30 days from April 7 — to allow the city to provide complete, documented responses to BIA’s outstanding questions and to allow BIA a reasonable opportunity to review those responses before the study is adopted.
Adopting a fee schedule on the basis of an incomplete record — particularly one that includes a 17.7 percent increase to the valuation table affecting all new construction — is not in the interest of Fairfield’s housing production goals or its RHNA compliance. Fairfield has a substantial housing production obligation, and permit fees that exceed the legally permissible limit, or that rest on methodology that cannot withstand independent scrutiny, are both a legal risk to the city and a practical impediment to housing production.
III. Request for a Phased Implementation of Any “Catch-Up” Fee Increase BIA recognizes that periodic fee studies are both appropriate and legally authorized. If, after conducting a completely thorough review, the City Council concludes that some increase to the Building Valuation Table is warranted, BIA respectfully urges the council to adopt a phased implementation schedule.
The study itself acknowledges that the Building Permit program is currently operating at 85 percent cost recovery. That means the program is substantially self-sustaining. The proposed 17.7 percent single-step increase would close the remaining gap in one action, imposing the full adjustment on the development community at once. BIA proposes that the Council instead adopt the following approach:
• Year 1 (FY 2026–27): Implement one-third of the valuation table increase, bringing the program to approximately 90 percent cost recovery.
• Year 2 (FY 2027–28): Implement one-third of the remaining increase, bringing the program to approximately 95 percent cost recovery.
• Year 3 (FY 2028–29): Implement the final increment, achieving full cost recovery if the program’s cost basis is confirmed through the ongoing monitoring and annual adjustment process described in the study.
This approach is consistent with how jurisdictions across California have managed meaningful fee increases when programs are already substantially self-sustaining. It protects Fairfield’s housing production pipeline during the phase-in period, allows the development community time to incorporate updated costs into project pro formas and gives the city an opportunity to monitor actual cost recovery in practice before committing to the full increase.
A three-year phase-in does not foreclose full cost recovery — it sequences the path to that outcome in a manner that is reasonable, transparent and consistent with Fairfield’s housing production obligations.
IV. Conclusion
BIA|Bay Area respectfully makes the following requests of the City Council:
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• Open and continue April 7, 2026, public hearing to a date no sooner than 30 days hence, to allow the city to provide complete, documented responses to the outstanding questions in BIA’s March 25, 2026, letter.
• Direct staff to address — with documentation, not narrative assertions — the specific unanswered questions identified in Section I of this letter, including the projected revenue impact of the valuation table increase, the nexus justification for all CAP allocations, the general public benefit cost allocation within CD Admin, the validation of the 1,650 productive hours assumption and the peer jurisdiction comparisons.
• Adopt a three-year phased implementation schedule for any “catch-up” increase to the Building Valuation Table, as described in Section III.
BIA|Bay Area is committed to working constructively with the City of Fairfield toward a fee structure that achieves genuine cost recovery while remaining reasonable, transparent and supportive of Fairfield’s significant RHNA housing production obligations. Higher fees mean higher rents and purchase prices for working families at a time when the region continues to experience an unprecedented supply and affordability crisis. We welcome the opportunity to meet with Mayor Moy, the Council, and city staff to discuss these issues prior to the continued hearing date.
Thank you for your consideration of this request.
Sincerely yours,
Lisa A. Vorderbrueggen
BIA|Bay Area East Bay Executive Director for Government Affairs 1000 Burnett Ave., Ste. 340, Concord, CA 94520
925-348-1956 (cell)
[email protected]
Sent Via Email
DATE: March 25, 2026
TO: Fairfield Chief Building Official Jeff Thomas
FROM: Lisa Vorderbrueggen, East Bay Executive Director for Gov’t Affairs
RE: Fairfield Building Division User Fee Study, dated March 9, 2026
Dear Mr. Thomas:
The Building Industry Association of the Bay Area submits this letter in response to the Fairfield Building Division User Fee Study dated March 9, 2026, prepared by Willdan Financial Services.
We appreciate the city's commitment to cost recovery and sound fiscal management, and we recognize that periodic fee studies are both appropriate and necessary. However, after careful review of the study and consultation with BIA members actively building in Fairfield, we have identified significant methodological concerns that we believe warrant the city's attention before the study is adopted.
Chief among them is the proposed 17.7 percent increase to the Building Valuation Table base rates — a double- digit, single-step hike that, if adopted as proposed, will have a material negative impact on housing production and affordability in Fairfield at a time when the city is obligated to meet substantial Regional Housing Needs Assessment targets.
We respectfully request that the city address the questions and concerns set forth below before finalizing and adopting the study.
I. Cost Recovery Baseline and Supporting Documentation
The study's foundational cost recovery figures require greater transparency and independent verification before they can serve as a reliable basis for fee-setting.
1. The study states the Building Permit program is currently operating at 85 percent cost recovery based on fiscal year 2025 activity levels. How was that figure derived? Is there a reconciliation showing actual permit revenue collected against actual fully burdened costs incurred, or is it a modeled estimate based on assumed permit volumes?
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2. The study notes that overhead amounts in Appendix A "will not reconcile to City budgets" because certain costs were excluded. If the figures don't reconcile to the budget, what is the authoritative source document that can be used to verify them?
3. The study identifies 70 fee increases, 92 decreases and 26 unchanged flat fees, with a net average increase of 2 percent. However, the valuation-based Building Permit program is recommended to increase by 17.7 percent. What is the total projected annual revenue impact of each category? The 2 percent average figure could mask a situation where the valuation table increase — which applies to all new construction — generates far more actual revenue than the nominal average suggests.
II. Overhead Allocation Methodology and Nexus to Building Services The study's overhead allocations must reflect a demonstrable and reasonable relationship between the costs recovered and the services provided to permit applicants.
4. Appendix A shows the Building Division carries a $207,265 indirect allocation, representing 9 percent of its cost base, derived from the city's Cost Allocation Plan. Which specific central service departments are included in that allocation? Does the list include departments — such as the city attorney, city manager or public safety functions — whose connection to building permit processing is indirect and would require an explicit nexus justification under California law?
5. The CD Admin allocation to Building is $572,464, representing 25 percent of the Building Division's cost base. What activities within Community Development Administration are covered by that allocation, and is any portion attributable to functions serving the general public broadly rather than permit applicants specifically?
6. Does the Cost Allocation Plan itself reconcile to the adopted budget? Has the plan been independently audited and when was it last updated?
III. Productive Hours and Fully Burdened Hourly Rate Calculations The fully burdened hourly rate is the product of total costs divided by productive hours. Errors in either the numerator or denominator directly inflate the resulting fee. The following questions go to the integrity of that calculation.
7. The study applies a uniform assumption of 1,650 productive hours annually across all positions. Is that figure validated against the adopted budget's full-time equivalent allocations and actual payroll records, or is it a standard consultant default? Does it reflect actual patterns of leave, non-billable time and training across Building Division classifications?
8. What was the data collection period used for staff time estimates? The Fairfield study says time estimates were gathered through staff interviews, but interviews are even less rigorous than a two-week monitoring period — were time logs or actual billing records used to validate interview responses?
9. Are any Building Division staff splitting time with other city programs — the Capital Improvement Program, code enforcement, general plan administration or other non-Building activities? If so, has that time been properly excluded from both the cost numerator and the productive hours denominator? Misalignment between these two figures will distort the fully burdened hourly rate in either direction.
10. The study shows $2,258,442 in Building Division salaries and benefits. How many full-time equivalents does that represent, and does that count match the adopted budget? If vacant positions are included in
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the budget but not currently filled, are those vacancies' hours included in the productive hours denominator — which would artificially lower the fully burdened hourly rate — or excluded, which could artificially raise it?
IV. Public Information and General Public Benefit Cost Recovery Not all Building Division costs represent private benefits to permit applicants. Activities that serve the general public should be funded, at least in part, by the General Fund rather than recovered entirely through permit fees.
11. What portion of CD Admin costs covers general public benefit activities — pre-application consultations available to any member of the public, counter walk-in inquiries, website maintenance and public outreach — versus activities directly tied to processing a specific permit application?
12. Fairfield's adopted budget language reportedly distinguishes between fee-supported activities and those that "support the Community, pre-development work, appeals and public information, and non-project- related activities." If the budget itself acknowledges that those categories are not appropriate for full cost recovery, how does the study treat them, and why?
V. Fund Classification and the Limits of 100 percent Cost Recovery The appropriate cost recovery target for any given activity depends in part on the fund structure under which the Building Division operates and the nature of the benefit provided.
13. Is Fairfield's Building Division operating under a Special Revenue Fund or an Enterprise Fund designation? That classification has direct policy implications. Special Revenue Funds are typically supported in part by the General Fund; treating them as fully self-sustaining Enterprise Funds — recovering 100 percent of all costs through fees — may be inconsistent with standard governmental accounting practice and with the expectations of property owners who already fund city operations through property taxes.
14. The study acknowledges the city may elect to set fees at less than 100 percent cost recovery. Has the City Council made any explicit policy determination — outside of this study — identifying which categories of service are appropriate for General Fund subsidy? Without such a framework, there is no principled basis for evaluating whether the 100 percent recovery target is appropriate for each individual fee type.
VI. Phase-In of Fee Increases
Where fee increases are significant, a phased implementation approach protects housing production and allows the development community time to adapt.
15. The proposed 17.7 percent increase to the valuation-based Building Permit table is a meaningful single- step increase. Has the city evaluated a phase-in approach, particularly given that the current program is already at 85 percent cost recovery — meaning only a 15-percentage-point gap exists? An immediate jump to 100 percent on the valuation table is difficult to justify when the program is already substantially self- sustaining.
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16. For the 70 flat fees that are increasing, what is the range of individual increases? A 2 percent average could mask individual fees increasing by significantly more. Are any individual fee changes large enough to warrant a phase-in recommendation independent of the valuation table?
17. Has the city conducted an economic feasibility analysis to assess whether the combined effect of all proposed fee changes on a typical single-family residential project or infill multifamily development is consistent with Fairfield's housing production goals and RHNA obligations? Such an analysis is standard practice in jurisdictions actively working to facilitate housing production.
VII. Peer Jurisdiction Comparison
The study includes no comparison of proposed fees or fully burdened hourly rates against comparable jurisdictions. Fairfield should conduct a meaningful peer comparison before adopting the study.
18. The study does not compare proposed fully burdened hourly rates or resulting permit fees against comparable Solano County cities. What do Vacaville, Dixon, Benicia and Suisun City charge for equivalent permits at representative valuation levels?
19. The proposed fully burdened hourly rate for the Building Plans Examiner is $115.82 per hour and for the Chief Building Official is $176.26 per hour. How do those rates compare to equivalent positions in comparable Solano County jurisdictions and similarly sized East Bay cities?
20. For a prototypical 20-unit infill apartment building at $5 million construction cost — a project type central to Fairfield's RHNA compliance — what is the total proposed Building Permit fee under the new valuation table, and how does that compare to what the same project would pay in Vacaville or Benicia?
VIII. Third-Party Contracting and Potential Double-Recovery Where a city contracts building services to outside consultants, the fee study must clearly account for those costs to avoid charging applicants twice for the same service.
21. Does Fairfield use any outside plan check consultants, contract inspectors or third-party review services for any portion of its Building Division workload? If so, are those contract costs reflected in the study's cost basis, passed through to applicants separately from the fully burdened hourly rate-based fees, or both?
22. The study includes a fee for "inspection by outside consultant" charged at actual cost per hour, which implies consultant usage exists. What is the annual volume and cost of that outside consultant work, and does any portion of it also appear in the overhead allocation or cost basis in a way that could create double recovery from applicants?
23. The study acknowledges that fees "will not reconcile to City budgets" in part because "contract costs" charged directly to applicants were excluded from the overhead calculation. Is there a complete accounting of all contract costs passed through to applicants separately, with confirmation that there is no overlap with overhead costs already recovered through the fully burdened hourly rate?
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Conclusion
BIA|Bay Area respectfully urges the city to pause adoption of the study and address the questions and concerns raised in this letter before proceeding.
The concerns identified here are not unique to Fairfield — independent peer reviews of comparable Willdan fee studies for Hollister and Morgan Hill identified many of the same methodological issues, and in both instances the proposed fees were found to significantly exceed those of comparable jurisdictions.
We are committed to working constructively with the city toward a fee structure that achieves genuine cost recovery while remaining reasonable, transparent and supportive of Fairfield's housing production goals.
Fairfield has a significant RHNA obligation, and permit fees that are higher than necessary — or that rest on a methodology that cannot withstand independent scrutiny — directly undermines the city's ability to meet that obligation.
We welcome the opportunity to meet with you and your staff to discuss these questions and to review any supplemental documentation the city can provide. We ask that the city refrain from scheduling the study for adoption until these issues have been addressed and BIA|Bay Area has had a reasonable opportunity to review the city's responses. Thank you for your attention to this matter.
Sincerely,
Lisa A. Vorderbrueggen
BIA|Bay Area East Bay Executive Director for Government Affairs 1000 Burnett Ave., Ste. 340, Concord, CA 94520
925-348-1956 (cell)
[email protected]
Memorandum
To: Jeff Thomas, Chief Building Official, Fairfield
From: Tony Thrasher, Principal Consultant, Willdan
Date: March 24, 2026, 2 p.m.
Subject: Willdan Responses to BIA Questions
The following is Willdan’s response to the Building Industry Association of the Bay Area’s (BIA) letter sent on March 25, 2026. Note that the decision to subsidize any fees included in the study is a policy decision up to the City Council. The recommendation of the study as determined by staff is full cost recovery since the services provided are private benefits related to regulatory compliance activities.
The City endeavors to continue to provide excellent regulatory services to the public. Therefore, it is essential that the City recover the cost of providing regulatory services to ensure that the existing service standard continues. Subsidies for such services can contribute to declining services standards and cause delays in plan check and inspection activity completion if the cost of such services are forced to compete with general benefit activities for a portion of the City’s general unobligated tax dollars. Regulatory compliance services are not general benefit activities.
Below are responses to the 23 questions under the 7 sections of concern by the BIA.
I. Cost Recovery Baseline and Supporting Documentation
1. The cost portion of the analysis utilized the budget of the Building department for FY 2026 excluding technology expenses, an allocated share of Community Development Administration for Admin support and compared that against the actual revenue received for providing inspection and plan check services for FY 2025.
2. The fiscal year 2026 budget can be used to determine that the expenses included in Appendix A are not above the adopted budget. The difference between Appendix A and the City budget is achieved by excluding contract services from overhead calculations.
3. The 2% referenced in the report is the average change in existing flat fees (set fee amount listed for service) comparing the total change in all flat fees to the total current existing fees treating each fee equally (irrespective of usage) only. It is not a statement of revenue effect.
Each fee listed has a full cost determination and so is restricted to full cost recovery or less on an individual fee basis. The valuation permit program is calculated separately and will be monitored on an annual basis and adjusted when needed to be at or below full cost recovery as policy dictates.
II. Overhead Allocation Methodology and Nexus to Building Services
4. The Cost Allocation Plan (CAP) allocation includes City Manager, Cable and Media Services, Human Resources, Finance Administration, Revenue, Accounting, Accounts Payable, Payroll/Purchasing, Operations Admin, Building Maintenance, Custodial Maintenance. All allocations in the CAP represent indirect support, as determined through a study that determined the reasonable allocation of indirect support to operating units. Such plans are reasonable for the determination of indirect support for user fee activities under California law.
5. CD admin was allocated based on the amount of personnel cost for all organization units they support. That includes Planning, Building, Business License, and Economic Development. Community Development Administration activities supporting the Building Division include departmental leadership, operational oversight, permit system management, staff supervision, and coordination of development services across divisions and departments. This is a sample of the functions necessary to support the delivery of Building Safety services including plan review, inspections, and permit issuance.
6. The allocations from the Cost Allocation Plan are reviewed by City auditors annually.
III. Productive Hours and Fully Burdened Hourly Rate Calculations
7. 1,650 is a reasonable amount reflective of reducing the total workable hours in a year by vacation, holidays, sick leave, and allowing for a couple breaks each day. The staff involved with providing services in the study do not perform daily timekeeping to allow for detailed attribution, which is typical for cities.
8. Reasonable estimates of time were provided by City staff that directly provide services to the public and multiplied by the respective fully burdened hourly rates to determine a reasonable estimate of cost to provide each service.
9. Fee determination is determined on an individual service request bases for flat fees and based on personnel explicitly budgeted to Building to provide services so there is no risk of including support of other budgeted activities or support for other City functions.
10. Building has 13 positions budgeted and vacant budgeted positions are intended to be filled in order to provide services for the fiscal year. A set standard of productive hours was used, not a department wide determination, so there is no effect on productive hour calculations.
IV. Public Information and General Public Benefit Cost Recovery
11. See question 5, as CD Admin was allocated.
12. Please provide page of cited reference in the City budget.
V. Fund Classification and the Limits of 100 percent Cost Recovery
13, 14. The Building budget is within the General Fund, and the City may charge up to the reasonable estimate of the full cost of providing regulatory compliance services.
VI. Phase-In of Fee Increases
15. The suggested fees in the report would place the City at the low end of fees for providing services in their area. This question states that there is only a 15% gap to full cost recovery but at the same time the increase needed to get to full cost is a meaningful amount, which is contradictory. The fee increase suggested is to close the 15% gap to achieve full cost recovery.
16. Each fee is detailed in the report, and no “phase in” to the suggested fee amount listed for each fee is being recommended.
17. Economic feasibility studies are not typically done in conjunction with a user fee study; the fee study is designed to establish the cost of providing services and ensures compliance with State law. The City has considered potential impacts of the proposed fee update, including its housing production goals and RHNA obligations. Building fees represent one component of overall development costs, and the proposed adjustments are modest when viewed across the full fee schedule.
VII. Peer Jurisdiction Comparison
A comparison was completed and presented in the study session on March 17, 2026 (video available online), and the only City that was less than Fairfield for the building plan Check and permit fees was Vacaville, who hasn’t done a fee study in almost a decade. 18, 19, 20. It is against the law for cities to set fees based on a comparison with their neighbors, or peers under any other characteristics. The study’s purpose was to determine the reasonable estimate of full cost of providing services for the City of Fairfield, and Fairfield alone as required by law. Since fee schedules are public information on each City’s website, the BIA is free to perform any additional comparisons.
VIII. Third-Party Contracting and Potential Double-Recovery
21. Contract services are used to provide some services as listed in the fee schedule, and the cost of such services are not included in the hourly rate calculations for City staff, and such costs are reflected directly in the cost of providing plan check and permit fees.
22. Consultant and contact service usage varies based on the needs of the project and such costs are reflected directly in the cost of providing plan check and permit fees. The consultant cost incurred that would be involved with providing Building services is not included in any overhead calculations.
23. See question 2. Building contract costs are excluded from fully burdened hourly rate calculations entirely.
Response to the conclusion in the BIA letter
The Bay Area BIA challenged the City of Hollister on their fees in 2019 alleging that the fees they adopted were not based on the reasonable cost of providing service. The City then contracted with Willdan in 2020 to do a cost study on the fees and subsequently adopted fees based on that study in 2021. Morgan Hill contracted with a different vendor in 2020/21 for their user fee study.
The fees included in this study are subject to a 60-day delay in implementation after Council adoption, if it is the will of the Council to adopt, on April 7, 2026, but the actual implementation date would be July 1, 2026, or 85 days after adoption. Since public hearing notice requirements require that the hearing is noticed 10 days in advance of the meeting, the public hearing has already been noticed and therefore must open on that date. The Council may open and then continue the hearing to a later date if it is their desire, but the City and Willdan have provided sufficient responses to the BIA’s questions above and believe that the 85 day delay in implementation is more than enough time to address any additional questions the BIA has.